We would just have a family owned and ran thrift store, but wouldn’t be a chain like Goodwill or Salvation Army. If we aren’t able to promise that they can write off their donations to our store, then we’d lose out on a lot of inventory. Does anyone know how this would work? Thanks!
Nope you need to not only be a non-profit and incorporate as a non-profit. You need to be a specific kind of a non profit to have donations be tax deductable.
The kind of non-profit that IS tax deductable will take 6 – 12 months to set up.
March 5th, 2010 at 11:38 pm
Nope you need to not only be a non-profit and incorporate as a non-profit. You need to be a specific kind of a non profit to have donations be tax deductable.
The kind of non-profit that IS tax deductable will take 6 – 12 months to set up.
References :
March 6th, 2010 at 12:15 am
You must be established and registered as a non-profit charitable organization, then apply to the IRS for 501(c)(3) status to obtain tax-deductibility for donations. It takes up to 3 years to get this from IRS. For-profit companies are, of course, not eligible for this tax-deductibility provision. This is why privately-owned for-profits open as consignment shops and split the proceeds with the property owner when sold. And few are profitable — rents, etc, eat up your 50% of the proceeds.
BTW, you will need a resale license and sales tax set up with your state, and most require a large deposit with the state against future sales tax collections.
References :